Auto Enrolment [AE] is the new legal obligation for employers to provide a workplace pension for their eligible staff.
From October 2017 Auto Enrolment will apply immediately to all new employers registering for a PAYE scheme. For existing employers, the final staging dates will be January 2018 depending on when they registered as an employer. After this date it will be business as usual for all employers.
598,000 employers have automatically enrolled their staff into a pension scheme thus far, 225,000 of these have been small and micro employers, however 675,000 still have duties to come.
Overall over 8,000,000 people have been automatically enrolled into a pension scheme since this process began.
Directors still have duties
Simply because you are the sole director of a company, if you are operating a PAYE scheme you still have statutory obligations under AE. You will need to notify the Pensions Regulator that you wish to opt out of the scheme, if eligible. If you are working under a contract of employment, you will not be able to opt out automatically and will still be required to provide and have in place a pension scheme.
We can assist you with opt outs for a fixed admin fee of £50.
Regulatory restrictions on Accountants providing financial advice
As Chartered Accountants we are not authorised to provide financial advice under the FCA rules, we can implement the AE scheme for you and ensure your compliance, however we cannot recommend a pension scheme. It is essential you seek advice around the various scheme viable and choose a scheme that best suits your workforce, we can direct you to our IFA who is regulated and quailed to assist you with this.
FIXED FEE SOLUTION – NEST
We are offering fixed fee packages for the government backed NEST pension, for small employers our fees are fixed at £450 for AE implementation and compliance, this will include the set up of the NEST pension scheme. There will be an additional charge per eligible employee per pay cycle of £4.50, this will over the ongoing requirements under AE that you assess employees at each pay period, automatically enrolling eligible employees as required. You will also have re enrolment duties every three years.
We can provide a tailored quote for the implementation of AE for other pensions, please contact us to discuss.
Fines & Penalties
Fines are harsh with regards to AE non compliance, there is a fixed penalty of £400 for late filing of a declaration of compliance, even if it later transpires that you are indeed compliant with your obligations. If you continue to be deliquent then fines will move to escalating penalty notices, moving to a maximum of £10,000 per day! Please do not assume this is scaremongering, the TPR have issued penalties at this level and seem mighty keen to continue doing so, see latest cases here.
If you are operating a PAYE scheme and have staff working for you, even if they are family members, you still have statutory obligation under AE. If you are not compliant with these you willl receive a fine and penalty this will increase to a level that could put you out of business. Do not neglect this important aspect of operating your business, you must act now.
Contact us for a free consultation today.